Seminar: Mauricio Prado, University of Cambridge.

Title: Warfare, Fiscal Capacity, and Performance: An Empirical Investigation.

We exploit differences in historical war casualties to estimate the impact of fiscal capacity on economic performance. In the past, states fought different amounts of external conflicts, of various lengths and magnitudes. To raise the revenues to wage wars, states made fiscal innovations, which persisted and helped to shape current fiscal institutions. Using historical war casualties to instrument for current fiscal institutions, we estimate substantial impacts of fiscal capacity on GDP per worker.